Coles spending $2.5bn on digital over the next two years

Supermarket Coles will spend $2.5 billion over the next two years on improving its digital offer, the business announced today.

The business will seek to improve its online shopping, as well as its self-service checkouts, data and automation across its warehouses, in an effort to streamline the experiences and make it even simpler for Australians to buy their groceries.

Coles’ chief executive Steven Cain said following its demerger from Wesfarmers, and the subsequent Covid-19 pandemic, the business is increasing its pace of change.

“There’s a myriad opportunity facing us. The market in Australia is very good for food and liquor. It’s growing, there’s plenty of opportunities, and we think we’ve got the assets to exploit some of them,” Cain said.

“It’s making sure you’re confident that you’ve got the right returns before you press the accelerator. And I think what we’re saying today is we’re pressing the accelerator.”

According to Cain, when Coles was demerged from former parent company Wesfarmers it wasn’t as advanced as it could have been – there hadn’t been enough investment in its online capabilities at the time, something he is hoping to rectify now.

These changes have been coming for a while. Last year Coles appointed former Walmart SVP Ben Hassing to the position of Coles’ chief executive e-commerce, who said in February the supermarket’s online transformation will focus on creating a seamless and unified customer experience.

“To activate this, we are connecting e-commerce and content. And then we’ll begin merging online and offline into a unified experience,” he said.

This became more important as the changes to shopping behavior throughout Covid-19 opened up new pathways to the ‘omnichannel shopper’: customers who shop both online and offline.

“These digitally-engaged customers are very, very important to Coles. We find them more loyal, they shop with Coles more frequently and they have a higher participation rate in Flybuys,” Hassing said.

“This is a fast-growing customer segment for us. The year-over-year growth in total spend with Coles is much higher, as well.”